MEXICO – Mexican multinational beverage and retail company Fomento Económico Mexicano, S.A.B. de C.V., doing business as FEMSA has appointed Daniel Rodriguez as CEO, effective January next year.
Rodriguez succeeds Eduardo Padilla, who has been at the helm of the largest independent Coca-Cola bottling group in the world since 2018.
Daniel Rodriguez joined FEMSA in 2015 and currently leads the Femsa Comercio division including the vast chain of Oxxo convenience stores.
Femsa said in a statement that Rodriguez will focus on “growth and innovation along with sustainability, inclusion, and diversity.”
Earlier this year, FEMSA expanded its footprint in the United States through the acquisition of Daycon Products Co. (“Daycon”), an independent specialized distribution company based in Upper Marlboro, Maryland.
According to FEMSA, Daycon will further expand and strengthen its distribution footprint along the East Coast of the United States, including Washington D.C. and the states of Virginia, West Virginia, Maryland, Delaware, New Jersey and Pennsylvania.
“This transaction represents another important step in FEMSA’s strategic path to build a leading national distribution platform in the United States,” FEMSA said in a statement.
US$470m Sustainability-linked bond
The transaction which is subject to customary closing conditions and approvals preceded a 9.4 billion pesos (US$ 470 million) sustainability-linked bond issued by the Mexican retail giant.
FEMSA, in a stock exchange filing, revealed that it plans to use resources from the bond to “refinance certain debt”.
Of the total of the bonds, Coca-Cola FEMSA placed the equivalent of 6,965 million pesos in seven-year securities with a fixed rate of 7.36% and the remaining 2,435 million pesos at a variable rate of 0.05% with a five-year term.
Being a sustainability-linked bond, the company has committed to reducing the use of water in the manufacture of its beverages.
Currently, Coca-Cola FEMSA uses 1.49 liters of water per liter of drink produced, with the issuance of these bonds it intends to reduce its use to 1.36 liters in 2024 and 1.26 in 2026.
“The stock certificates are subject to compliance with these key sustainability performance indicators, which will be verified by an independent external party,” FEMSA revealed.
“In the event that said indicators are not met by the dates established in the stock certificate documents, the rates of interest will increase 25 basis points.”
Sustainability-linked bonds have become a popular way for companies to raise funds in recent times. Not only are they attractive to impact investors seeking to halt climate change, but they also show commitment to protecting the environment.
Apart from Coca-Cola FEMSA, other major food companies with sustainability linked bonds include US consumer goods giant General Mills and leading poultry processor Pilgrim’s Pride.
According to a recent report by Scope, the rapid growth in ESG-linked bonds reflects the powerful combination of the political, regulatory, and investor pressure to put sustainability at the top of Europe’s economic and financial agenda.
In the report, Scope projects that by the end of 2021, the share of ESG-linked bonds should easily exceed 25% of the total corporate bonds issued in Europe in 2021.
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